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Free-Daily.com's purpose is to report on the emerging free daily newspaper industry. While many experts have written off print media, free dailies are a promising concept that works on a number of levels. Tabloid-size free dailies are more widely read by young readers, giving them the news they need to lead their lives. Reaching this demographic is essential to advertisers. Free dailies are also an outlet for quality journalism.

While Free-Daily.com wants to see this industry developed, this site isn't about cheerleading. We report the bad news as well as the good, and we publish editorials highlighting problems and solutions.

Wednesday, April 30, 2008

You've got to admit that Baltimore's new free daily has a clever, memorable name — b. Just one lowercase letter. And that's not the only new idea behind this newspaper and Web site that launched April 14. Free-daily.com asked b General Manager Brad Howard these questions.

Free-Daily.com: First some stats. What's your current circulation?

Howard: We are distributing 50,000 copies of b using more than a thousand bright orange newspaper boxes located where Baltimore's young adults live, work and play — downtown Baltimore, Federal Hill, Canton, Towson, Cockeysville, Annapolis. You can also find b at Royal Farms, CVS, Mr. Tire, Merritt Athletic Clubs, Brick Bodies, college campuses or your favorite watering hole. We also distribute the paper using a network of samplers who pass out the paper to eager readers in high traffic areas — train stations, busy intersections, light rail, park & rides, the metro. Overall, we plan on distributing 100,000 copies by the end of the year.

Free-Daily.com: How many pick-up points?

Howard: 2,400

Free-Daily.com: How many racks?

Howard: 1,000

Free-Daily.com: Current average page count?

Howard: 36

Free-Daily.com: Cost for a full-page ad?

Howard: Local open rate is $2,200

Free-Daily.com: How large is your staff?

Howard: 22

Free-Daily.com: How many of them are in news, sales, circulation, etc.?

Howard: We have a dedicated news and managerial staff that operates in office space separate from The Sun. All sales people throughout the Baltimore Sun Media Group's different properties can sell into b.

Free-Daily.com: How did your first day go? What did you do well and what could have been done better?

Howard: Fabulously. The paper and bthesite.com were warmly received. In fact, things really went according to plan.

Free-Daily.com: It's been said that this is a tough time for advertising. Isn't it risky to start a new publication during an economic slow down?

Howard: The Baltimore market has a high concentration of people employed in government positions, the defense industry and health care, which are all recession-resistant sectors. As a result, the Baltimore market's economy stays pretty stable in good times and bad.

Free-Daily.com: What's different between the b and RedEye (a free daily in Chicago also owned by the Tribune Co.)?

Howard: We're truly a unique, authentic and daily voice for young adults in the Baltimore area. About a third of our content will come from our readers. We learned a lot from RedEye, tbt and Quick, but b is all about Baltimore.

Free-Daily.com: Why did you pick a single letter for your title? What's your thinking about that?

Howard: Why not? We tried a lot of different titles, but b, in addition to its obvious tie to Baltimore, really connected with our audience during focus groups. It is simple, even elegant. It stands for whatever our audience wants it to "b."

Free-Daily.com: Does Tribune have plans to replicate this format in other markets?

Howard: At this point I have not heard of any specific plans for replication in other markets; however, Tribune is always looking for ways to satisfy market demands with quality products.

Free-Daily.com: Metro International CEO Per Mikael Jensen is quoted in the Wall Street Journal as saying his company erred by not rolling out enough editions in the United States. Metro's in three markets and he thinks they should have been in 10 in order to attract national advertisers. Unless Tribune rolls out more b's or RedEyes, isn't your company in danger of the same thing?

Howard: We are following a model that has proven successful in several other markets, including Chicago, Dallas and Tampa Bay. These other papers were extremely generous by sharing their lessons learned when they launched a young-adult paper years ago. All three of these papers are successful, and we expect b to succeed, too, because we are filling a need that is not being met here in Baltimore — a free, daily newspaper produced by and for Baltimore's young adults. And unlike Metro, we have a national sales staff that can package b with The Sun, our community newspapers and our interactive products.

Free-Daily.com: Why is Baltimore a good market for a youth oriented free daily?

Howard: Baltimore is the 19th largest market in the United States and has almost 600,000 young adults. That's a market segment with some heft.

Free-Daily.com: Is the Examiner a competitor? Do you compete more with alt-weeklies, which are typically youth oriented?

Howard: b and bthesite.com are filling a vacuum in the Baltimore market. A free, daily newspaper developed by and for Baltimoreans in their 20s and 30s didn't exist before b. It does now.

We caught up with Metro International chief executive Per Mikael Jensen to ask him if he was quoted correctly in the Wall Street Journal where he lamented that his company hadn't started more editions in U.S. markets years ago. Now Metro has its three U.S. papers (New York, Philadelphia and Boston) up for sale.

"I was quoted correctly, but being a journalist myself I know that all you say won't get quoted. So it was a few words out of many that made it to WSJ," said Jensen, who took the top job at the international free daily chain in November. "The context is correct, though. I do believe that Metro should have launched in eight to 12 cities in U.S. much earlier to gain size and national presence. But nobody said it's too late!

"Creating a national network of free papers would also be interesting, attracting those many national advertisers that needfree papers to get in contact with the young, affluent audience that we reach so well north of the border — and in the three cities where we publish," Jensen told Free-Daily.com. "... No single [free-daily] company can claim to be national in the U.S. And that is a huge opportunity for free newspapers and for Metro."

Jensen declined to comment rumors that Metro was leaving the U.S., however. "All I can say is that we are constantly looking for the best options to run our papers. That includes partnerships, JVs (joint ventures) and so on."

Saturday, April 26, 2008

A photographer for the Baltimore Examiner was assaulted while taking photos outside a school for a story about school violence, according to the Baltimore Sun and Examiner. Arianne Starnes, 24, said she was thrown to the ground Thursday after a student at Reginald F. Lewis High School left a group of about 20 others. The student grabbed Starnes' cameras, pulling at the straps and threatening her. After a struggle, Starnes was pushed backward to the ground, falling on her cameras. Starnes stood up and was again confronted by the student, who this time pointed his finger at her head and pretended to shoot her, saying "I told you not to take a ... picture." School police took Starnes' statement at The Examiner's office, and an investigation is under way.

Here we go again. The online publication MediaLife is bashing the free daily industry again with another story that is rife with errors. The story's premise is that the economic downturn is worse for free dailies than for other media. As evidence, reporter Heidi Dawley cites last week's closure of BostonNOW, a quarterly loss reported by Metro International and losses Rupert Murdoch has taken in the early stage of his new free daily in London.

Let's take these points one by one.

1. The Icelandic telecommunications company Dagsbrun pulled the plug on BostonNOW because of problems it was having with its businesses in Europe that have nothing to do with free daily newspapers, according to BostonNOW CEO Russel Pergament. "Their focus now appears to be primarily upon their core retail holdings. North American media is not even a distant second," Pergament said. Publisher Mike Schroeder added, “This newspaper, not even a year old, is right on track for profits in Year Three, just as the business plan called for.”

2. Metro reported a $8.9 million (U.S.) loss in the first quarter, but that was 36 percent better than in the same quarter a year ago. Moreover, Metro appears to have done an about-face when it comes to confronting its business problems by closing money-losing papers and investing in growth markets. Metro's three U.S. papers were underperformers long before the current economic downturn. Now Metro is looking at its options for those papers which could include partnerships and joint ventures.

3. Murdoch lost about $34 million (U.S.) in the first 10 months of operating his new free daily, the London Paper. With a daily circulation of 500,000, it's easy to see how the losses could pile up. But, again, those losses began before this downturn in the economy, and they would have happened whether there was an economic slowdown or not. For him, it's an investment in a new business and a way to grab market share from competitors.

Then reporter Dawley makes the unattributed claim that "the vast majority" of free dailies are losing money. Really? How would she know? By my count, 64 free dailies operate in the U.S. and Canada, and 21 of them are privately held. Their owners aren't going to disclose their financials publicly. But when a paper has been around for 10 or 20 years, you've got to assume it's doing something right.

The public companies that own the 23 other free dailies are so large that they don't have to break out information about individual papers. So we only know bits and pieces. Tribune Co., for instance, voluntarily disclosed that its Chicago RedEye and amNewYork are profitable, but it was under no legal obligation to do so. As for Metro, numerous news reports have focused on the fact that its three U.S. free dailies are losing money, but one has to dig deep into the company's financial statements to see that its group of seven free dailies in Canada (jointly owned with TorStar Corp.) are in the black, and growing like gangbusters (See page 10).

It's also curious that a story about the economics of newspapers wouldn't mention the rising cost of newsprint.

Nobody is disputing that all newspapers face economic pressures these days. But traditional paid newspapers, saddled with high-cost personnel and expensive infrastructure (giant presses, old buildings), are in more jeopardy than more nimble free dailies (which typically have smaller staffs, outsource their printing and lease space).

And momentum matters too. For years, paid papers have been the subject of negative publicity about the loss of readers, and the frequency of such stories seems to have increased in the past couple of years. On the other hand, free papers are on a roll. Consider the following:

• Freedom Newspapers has switched its 102,000-circulation East Valley Tribune (based in the Phoenix suburb of Mesa) from paid to free, and is building a state-of-the-art printing plant for it — a major vote of confidence in the free daily concept.

MediaLife apparently has an agenda against free dailies (see posts on 07-27-2007, 09-28-2007), but there is ample evidence that these papers will do well during difficult times. In fact, they might do much better than traditional paid newspapers.

One of the first free daily newspapers, the Colorado Daily, has moved into the building that houses its former competitor, the paid Boulder Daily Camera.

The Camera and Colorado Daily will maintain separate newsrooms and separate news and advertising staffs even though the two papers have the same owner, said Lou Patterson, the Colorado Daily's operations manager.

"(We're) next-door neighbors rather than roommates," Patterson said, according to a story in the Camera.

The Camera's red brick building faces Pearl and 11th streets in downtown Boulder. The Daily's 20 employees will move into the back of that building, which faces Walnut Street.

"It makes perfect sense ... It is a better location, it's much cheaper and allows us to realize some operation synergies that were not possible in their current location," said Al Manzi, president of Prairie Mountain Publishing, owner of the two papers.

The Colorado Daily originally was the student-run paper at the University of Colorado, but it split away from the university in 1971 in a dispute with the school's regents over its Vietnam War coverage. The student editors set up shop in an office above a beer joint a block from campus and published the paper on their own without university support.

To pay the bills, the Daily expanded its advertising base by distributing citywide. It began sending reporters to city council, county commission and school board meetings. And with that, a 34-year battle with the Camera began.

In the 1990s, the Daily suffered a number of problems including an embezzlement scandal.

In September 2005, the Camera's owner, E.W. Scripps Co., bought the Daily. Then Scripps transferred ownership of both papers to Prairie Mountain Publishing, a joint venture it has with Denver-based MediaNews Group, publisher of The Denver Post.

HISTORICAL NOTE: The Colorado Daily is the nation's oldest operating free daily newspaper. There were at least two free dailies before it: the San Fernando Valley's Los Angeles Daily News and the Contra Costa Times, based in Walnut Creek, Calif., east of San Francisco. However, the Contra Costa paper switched to paid in the 1960s and Daily News began charging in 1982.

Tuesday, April 22, 2008

Rupert Murdoch is reportedly close to buying the Long Island newspaper Newsday from Tribune Co. for $580 million. The transaction will also give Murdoch another jewel — amNewYork, a 4-year-old free daily that goes head-to-head with his paid New York Post.

Newsday launched amNewYork in October 2003, and the paper turned a profit in 2006. It's free-daily rival in New York, Metro, still loses money four years after its debut, and is now up for sale.

One reason for amNewYork's success is that it is supported by Newsday. It uses Newsday's stories and it piggybacks on its ad deals. The two papers use the same printing plant, too.

“We’re able to realize synergies across the two products, but we’re not cannibalizing each other," amNewYork Publisher Terry Jimenez told Editor's Weblog earlier this year.

But amNew York is not a re-hash of Newsday. Newsday published a New York edition from 1985 to 1995, but couldn't get traction in a city with three dominant dailies. AmNewYork has the look and feel of a gritty New York daily in a league with the Post and Daily News.

A big question with Murdoch acquiring Newsday is whether he'll keep amNewYork or kill it to reduce competition for the Post. However, in London Murdoch has both free and paid dailies. In fact, Murdoch continues to operate his free, 500,000-circulation daily in London even though it lost 17 million pounds ($33 million U.S.) in its first 10 months of operation, according to the Guardian of London. With amNewYork, he would be getting a paper that makes money.

Per Mikael Jensen, the former Danish TV executive who became chief executive of free-daily giant Metro International in November, told the Wall Street Journal that he wishes his company would have expanded faster in the U.S.

Metro has been successful in most of the industrialized world, launching some 70 editions in 23 countries since 1995. But in the U.S., Metro has only three editions with a combined circulation of 630,000. Metro started in Philadelphia in January 2000, followed by Boston in May 2001 and finally New York in May 2004.

Jensen told the Journal that Metro made some mistakes in the U.S. by not expanding quickly into enough cities. As a result, it wasn't big enough to get the attention of major advertisers. "We probably needed to come into not three cities but 10 cities," Jensen said. Metro put the three papers up for sale in January, but so far there have been no takers.

Monday, April 21, 2008

If you're following Metro International, the world's biggest free daily newspaper publisher, you'll see reports later today about the company's first quarter financials. The headline will be that Metro had a loss of 5.6 million euros ($8.9 million U.S.), which was 36 percent better than during the same quarter a year ago.

A year ago, Metro was in a free fall, with a CEO who had one foot out the door. No leadership was on the horizon. A year later, Metro has a new CEO, former Danish TV executive Per Mikael Jensen, who is straightening out the company's finances by closing unprofitable titles and investing where growth is likely. He's even cutting back on expenses at company headquarters. It's the kind of story smart investors crave — an undervalued company on the way up.

The one country where Metro seems to have the most problems is the U.S., where its three editions lost a combined $3.2 million in the first quarter. Sales were down 5.7 percent in the quarter excluding the 12 percent impact from the depreciating U.S. dollar.

Real sales were down 12 percent in Philadelphia and 8 percent in Boston. However, New York was flat — not bad considering the advertising slump all media faced in the Big Apple. Metro noted that a new Scarborough study it commissioned found it was the most-read free newspaper in New York City, a slam on competitor amNewYork.

In one of his first moves as CEO, Jensen put the three U.S. editions up for sale in mid-January. But three months later, it appears there are no buyers.

What's next for these editions?

Previous CEO Pelle Törnberg said he had a policy of shutting down titles that didn't make money after three years. He didn't apply that rule to the prestigious U.S. market. Philadelphia began in January 2000 and hasn't made money. Boston began in May 2001 and hasn't made money. New York, which launched in May 2004, isn't profitable but is the closet to making money.

For Metro to call itself a "global" or "worldwide" newspaper company it needs to be in the United States. So Metro under Törnberg was willing to lose money in order to stake its claim in the USA.

Today's financial report also notes that Metro is losing less money in the U.S. after the layoffs of 27 of its 138 employees. At the moment, Metro Boston lacks a publisher and Philly editor Ron Varrial is covering for New York. Georg Tsaros, from Sweden, is the interim publisher in New York. There are a few other blank spots in the papers' mastheads.

The bright spot in Metro's report was its Canadian joint venture. Sales surged by 23 percent, from $12.3 million to $15.3 (U.S.). While Metro is having problems in the U.S., it says its Toronto and Montreal editions "deliver good profit margins while the new start-ups in Ottawa, Vancouver, Edmonton, Calgary and Halifax invest in readership.

COMMENTARY: Metro needs to find a partner in the United States. It should look at its experience in Canada. If it were to pair up in the U.S. with a big national newspaper chain (MediaNews, Gannett, McClatchy, Tribune, Lee, Journal Register, etc.) it could expand effortlessly, allowing paid papers to go free. Free means more people see print ads and those ads work better.

The Baltimore Examiner staff won five prestigious MDDC (Maryland-Delaware-District-of-Columbia) Press Association awards — the first for the Examiner chain. Competing against the Washington Post and the Baltimore Sun, the Examiner won for its investigative series on the city's homicide rate (Luke Broadwater for Murder City series) (Stephen Janis and Luke Broadwater for Cold Cases, Broken Hearts - an investigative piece on the high number of unsolved murders in the city). Editorial Writer Marta Hummel won for her editorial on the city school system. The Examiner sports staff was honored for its Cal Ripken Hall of Fame special section.

Monday, April 14, 2008

A big day for free daily newspapers. BostonNOW abruptly closed after a year in business while the Tribune Co. launched a youth-oriented free daily in Baltimore modeled after its successful RedEye in Chicago.

BostonNOW posted a story on its Web site this morning that said today’s edition would be its last because of tough economic conditions its investors face in Iceland. The following is from that story:

“The death of any newspaper is a sad thing,” stated CEO Russel Pergament, “but the death of a vibrant, flourishing newspaper because of economic turmoil thousands of miles away is beyond sad and is something we never anticipated and for which we were totally unprepared.”

“Our overseas investors are honorable people who have endeavored to fulfill all obligations to this newspaper,” he continued, “but the tumult in foreign credit markets has forced a change in our original understanding and their focus now appears to be primarily upon their core retail holdings. North American media is not even a distant second.”

“This newspaper, not even a year old, is right on track for profits in Year Three, just as the business plan called for,” says Publisher Mike Schroeder, “so this decision by our overseas investors, while perhaps understandable, is deeply troubling.”

BostonNOW’s editorial content, especially its strong local reporting, has been picked up dozens of times by Boston’s paid dailies and TV outlets. The Economist magazine lauded BostonNOW in January as one of the finest free dailies in the United States.

Today's final edition carries a full page house ad bragging about how it scooped the Boston Globe on a story. Yet Monday's edition didn't mention BostonNOW's closure. The Globe will likely carry that story tomorrow.

BostonNOW had 52 full-time and 100 part-time staffers, who will all be losing their jobs. The closure is also a setback for Pergament, who started a group of successful weekly papers in the Boston area and later launched Boston Metro. He was seen as the face of BostonNOW.

Boston Metro remains but in a weakened state. In the past few months, it lost both its editor and publisher. And Metro International put it up for sale in January, but there has been little or no interest on the part of would-be buyers.

The news is better in Baltimore where a new free daily with a one-letter title — "b" — hit the streets today.

Launched by Tribune Company's Baltimore Sun, the "b" will be aiming for the 18-to-34 age group. It is modeled after Tribune's successful RedEye in Chicago, which emphasizes quick-read news items, sports and a lot of entertainment.

The first edition had 40 pages and the initial distribution was 50,000. The paper hopes to have a circulation of 100,000 by year's end. The cover story showcased photos of Baltimore's neighborhoods.

Baltimore already has a free daily, billionaire Phil Anschutz's Examiner. But the two papers will be different in terms of news coverage and distribution. The Examiner reads like a traditional daily but has a conservative slant on national news. The "b," if it is anything like RedEye, will focus more on the nightclub scene than the country club scene.

The b's choice in distribution methods could give it an advantage over the Examiner when it comes to advertisers. The Examiner is has been widely criticized for throwing papers on driveways. In the eyes of advertisers, this kind of controversy shows the Examiner isn't reaching its intended audience. On the other hand, the "b" will be able to say that its audience is self-selected because its readers are choosing to pick up the paper each day from a rack or a stack at a store, coffee shop, bar, gym, etc. That will make a "b" reader more desirable to an advertiser than an angry homeowner who gets an unwanted Examiner.

If the "b" succeeds like RedEye has, don't be surprised if Tribune opens similar papers across the country. While Tribune faces troubles on many fronts, its free dailies are definitely a bright spot -- and perhaps the company's future.

Friday, April 11, 2008

The City Paper, a free daily in Nashville that has struggled for 7-1/2 years to make a profit, has been sold to a local company that plans to reduce its publication schedule to twice a week beginning April 28. Publisher Albie Del Favero and Editor Clint Brewer will continue to have the same jobs after the sale, and no layoffs were planned. The buyer, SouthComm Communications, also owns online business, music and news sites. Terms of the deal weren't disclosed but the seller, Caterpillar machinery dealer De Thompson V, will join the board of directors of SouthComm and take a stake in the company, according to NashvillePost.com, a site owned by SouthComm.

SouthComm, headed by former Nashville council member and former local alt-weekly publisher Chris Ferrell, told the Nashville Business Journal he has been working on a new model for print and online media and the City Paper fits into his model. The model includes breaking news through e-mails and the Internet, while serving readers through less-regular print products.

Last November, Publisher Del Favero said in a press release about the purchase of a new software system that his paper was evolving from print to online: "We are a free daily in the mold of European commuter dailies, but since Nashvillians don’t typically commute via train or the bus, we distribute the paper in office buildings rather than commuter stations. Because of this, our readers are more likely to read The City Paper at their desks in the morning. And what we found was that increasingly more of them were actually reading the paper online. Because of this online readership growth and the expense of printing and delivering the paper each and every day, we are slowly evolving the paper from a print product to a primarily digital product."

Wednesday, April 09, 2008

AD LEAD: Starbucks is inserting loyalty cards in both the Chicago Tribune and its free daily counterpart, RedEye, Editor & Publisher reports. If Starbucks is willing to divide its print budget between a free and paid paper, maybe they'll spend money with other free dailies. ...

VOLATILE CIRCULATION: Circulation has been going up and down like a yo-yo at Boston Metro — from 187,000 to 135,000 to 170,000, all in a few months, the Boston alt-weekly The Phoenix reports. Boston Metro has other troubles. It lost publisher Stuart Layne in January, followed by editor Saul Williams a few weeks later. Metro International put the Boston paper and its counterparts in New York and Philadelphia on the block, but so far no takers. All of this has got to be helpful for beantown's new free daily, BostonNow, headed by Russel Pergament. ...

EDITOR SUES: Richard Dooley, who was acting city editor of the Halifax Daily News, is suing the owners of the paper, who shut it down and started a free daily in its place in Feburary. Dooley claims that owner Transcontinental let him go in "an insensitive and unprofessional manner" and "without just cause and without any notice," the competing Halifax Chronicle Herald reports. The new paper, Halifax Metro, is owned by Transcontinental, Torstar Corp. (Toronto Star) and Metro International.

What is it about Colorado and free daily newspapers? Maybe it's the altitude or Coors beer, but Aspen, Breckenridge, Boulder, Denver, Glenwood Springs, Granby, Grand Junction, Steamboat Springs and Telluride each have one. In fact, Aspen has two of them since the 1980s, which is quite a feat for a town of 5,900 people. And now it looks like Vail will get a second free daily as well.

The new Vail paper is being started by Jim Pavelich, who founded the free Vail Daily in 1981. He sold the paper in 1993 to Swift Newspapers of Reno, Nev. As part of the sale, Pavelich agreed to a non-compete clause which kept him out of the newspaper business in that area until the late 1990s. During that time, he and former Aspen Times editor Dave Price went to California where they built the Palo Alto Daily News, which went from a circulation of 3,000 to 60,000 over 10 years. In 2005, they sold the Palo Alto paper to Knight Ridder.

According to a report on the Web site RealVail.com, Pavelich decided to start the newspaper after becoming frustrated with how his old paper was covering the news in Vail, where he lives.

“It was the biggest tourist holiday of the year and the big headline on the front page, and I’m paraphrasing, said something like, ‘I hate living here,’ and although I don’t remember the details, I remember that the headline was so unbelievably negative about nothing,” Pavelich told RealVail.com. “I understand this is a real town with real issues, but they’ve lost touch with why people come to Vail and why people live here.”

Pavelich will be going up against Swift, whose Steve Pope didn't want to comment on the idea of a new newspaper in Vail. Swift owns free dailies that are competing with other dailies in Aspen and Grand Junction.

Pavelich doesn't have a staff or a start date for the new paper. He's accepting resumes at jp@sfdaily.net.